The Australian dollar weakened against all of its 16 major peers before the leaders of Germany and France meet today amid concern Europe’s sovereign-debt crisis is hurting global growth.
The so-called Aussie fell for a fourth day after data showed the South Pacific nation’s retail sales unexpectedly stagnated in November and Pacific Investment Management Co. said the Reserve Bank will need to ease monetary policy. New Zealand’s dollar, nicknamed the kiwi, maintained a three-day drop after a report showed the nation’s trade deficit widened.
Australia’s dollar fell 0.5 percent to $1.0173 as of 4:28 p.m. in Sydney from the close in New York on Jan. 6. New Zealand’s currency was little changed at 78.02 U.S. cents.
Credit Ratings
Germany will offer 4 billion euros ($5.1 billion) of six- month bills today, and France will auction a total of 7.7 billion euros of debt maturing in 364 days or less. Greece will offer bills tomorrow, while Spain and Italy will sell debt later this week.
Standard & Poor’s said last month it may lower the credit grades of 15 euro nations, including Germany and France.
Australia’s retail sales (AURSTSA) were unchanged in November, a report from the statistics bureau showed today, compared with the 0.4 percent gain estimated by economists in a Bloomberg News survey.
Australian 10-year government notes advanced, with yields falling six basis points, or 0.06 percentage point, to 3.73 percent.
Statistics New Zealand said today that the country’s imports exceeded exports by NZ$308 million ($240 million) in November, compared with a revised NZ$228 million deficit in October. The median estimate of economists was for a NZ$300 million shortfall.
Futures traders raised their bets the Australian dollar will rise against the U.S. currency, figures (.ADLRGN) from the Washington-based Commodity Futures Trading Commission show. The difference in the number of wagers by hedge funds and other large speculators on a gain in the Aussie compared with those on a drop was 46,537 on Jan. 3. While the so-called net longs were the most since September, the number was still less than the 2011 high of 90,938.
The net longs on Australia’s currency “remain well below their highs, reflecting some uncertainty regarding the global economic outlook,” Emma Lawson, a currency strategist at National Australia Bank Ltd. in Sydney, wrote in a report today. (Bloomberg)
The 17-nation euro yesterday erased losses versus the dollar after the Financial Times reported that Europe may combine temporary and planned permanent rescue facilities to bolster its bailout resources. The European Central Bank is forecast to cut interest rates tomorrow. Australia’s dollar rose against most major counterparts after a report showed faster- than predicted economic growth.
The euro advanced 0.2 percent to 104.33 yen as of 1:30 p.m. The common currency appreciated 0.2 percent to $1.3422. The dollar was unchanged at 77.73 yen. U.S. Treasury Secretary Timothy F. Geithner yesterday backed a German-French push for closer European cooperation, urging policy makers to work with central banks to erect a “stronger firewall” to end the crisis.
Rescue Funds
Operating the European Stability Mechanism in combination with the 440 billion-euro ($590 billion) temporary fund next year would potentially boost Europe’s anti-crisis resources to 940 billion euros. There were negotiations over pairing the two.
The ECB will reduce its benchmark rate to 1 percent from 1.25 percent on Dec. 8, according to the median estimate of 58 economists surveyed by Bloomberg.
ECB Governing Council member Ewald Nowotny said this week that the central bank is observing liquidity shortages in the banking sector and can do more to supply funds.
The euro will rise to $1.37 by September 2012, according to a Bloomberg News survey of analysts. It has fallen 1 percent in the past month, according to Bloomberg Correlation-Weighted Indexes tracking the currencies of 10 developed markets. The yen has advanced 2.4 percent, the best performer, and the dollar has gained 1.9 percent over that period, the data show.
High-Yield Currencies
Jobless claims in the U.S. probably fell to 395,000 last week from 402,000 the prior week, economists in a Bloomberg News survey forecast before the Labor Department tomorrow.
Consumer sentiment will likely pick up this month, according to another Bloomberg survey before the preliminary Thomson Reuters/University of Michigan survey due on Dec. 9. Confidence rose to 65.8 from 64.1 at the end of November, the data is forecast to show. (Bloomberg)
The Australian dollar climbed to its strongest level in more than three weeks as Asian stocks gained after Federal Reserve Chairman Ben S. Bernanke eased concerns the U.S. economy may stall.
The so-called Aussie appreciated against 15 of its 16 major peers before a report tomorrow that is forecast to show Australian building approvals increased in July by the most in four months and after traders trimmed bets that the Reserve Bank will reduce its benchmark interest rate this year. New Zealand’s dollar advanced before a U.S. report that economists said will show consumer spending rose last month.
“Expectations of rate cuts in Australia have been wound down and improved risk appetite following Bernanke’s comments last week is supporting the Aussie,” said Janu Chan, an economist in Sydney at St. George Bank Ltd.
Australia’s dollar strengthened to $1.0618 as of 1:54 p.m. in Sydney from $1.0573 in New York on Aug. 26 and earlier touched $1.0626, the most since Aug. 4. It gained 0.5 percent to 81.48 yen and earlier reached 81.52, the strongest since Aug. 8.
New Zealand’s dollar climbed to 84.41 U.S. cents from 84.07 cents last week and reached 84.49 cents, the most since Aug. 5. It gained 0.5 percent to 64.78 yen.
The MSCI Asia Pacific Index rose 1.7 percent. Standard & Poor’s 500 futures indicate U.S. stocks may extend last week’s gains after Bernanke on Aug. 26 signaled the economy isn’t weak enough to warrant additional stimulus. U.S. consumer spending is likely grew 0.5 percent in July according to economists surveyed by Bloomberg before today’s Commerce Department report. (Bloomberg)
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